The Idea Factory: Bell Labs and the Great Age of American Innovation

by Jon Gertner

Where is the knowledge we have lost in information? —T. S. Eliot, The Rock

At the peak of its reputation in the late 1960s, Bell Labs employed about fifteen thousand people, including some twelve hundred PhDs.

The men preferred to think they worked not in a laboratory but in what Kelly once called “an institute of creative technology.” This description aimed to inform the world that the line between the art and science of what Bell scientists did wasn’t always distinct.

“I can always hire mathematicians,” he once said at the height of his fame, “but they can’t hire me.”4

Edison on his skills vs specialists

Vail also saw it as necessary to merge the idea of technological leadership with a broad civic vision. His publicity department had come up with a slogan that was meant to rally its public image, but Vail himself soon adopted it as the company’s core philosophical principle as well.16 It was simple enough: “One policy, one system, universal service.”

Frank Jewett, whose speeches were often long-winded and hyperbolic, found a way to explain the essential idea of his new organization. An industrial lab, he said, “is merely an organization of intelligent men, presumably of creative capacity, specially trained in a knowledge of the things and methods of science, and provided with the facilities and wherewithal to study and develop the particular industry with which they are associated.” In short, he added, modern industrial research was meant to apply science to the “common affairs” of everyday life. “It is an instrument capable of avoiding many of the mistakes of a blind cut-and-try experimentation. It is likewise an instrument which can bring to bear an aggregate of creative force on any particular problem which is infinitely greater than any force which can be conceived of as residing in the intellectual capacity of an individual.”

Buried within Jewett’s long speech was a clear manifesto. The industrial lab showed that the group—especially the interdisciplinary group—was better than the lone scientist or small team. Also, the industrial lab was a challenge to the common assumption that its scientists were being paid to look high and low for good ideas. Men like Kelly and Davisson would soon repeat the notion that there were plenty of good ideas out there, almost too many. Mainly, they were looking for good problems.

Engineering, however, was different. Kelly defined it as the application of science to a problem affecting society.

If an idea begat a discovery, and if a discovery begat an invention, then an innovation defined the lengthy and wholesale transformation of an idea into a technological product (or process) meant for widespread practical use. Almost by definition, a single person, or even a single group, could not alone create an innovation. The task was too variegated and involved.

Morton would eventually think more deeply about the innovative process than any Bell Labs scientist, with the possible exception of Kelly. In his view, innovation was not a simple action but “a total process” of interrelated parts. “It is not just the discovery of new phenomena, nor the development of a new product or manufacturing technique, nor the creation of a new market,” he later wrote. “Rather, the process is all these things acting together in an integrated way toward a common industrial goal.”

Eugene Gordon, points out that there were two corollaries to Morton’s view of innovation: The first is that if you haven’t manufactured the new thing in substantial quantities, you have not innovated; the second is that if you haven’t found a market to sell the product, you have not innovated.34

In early 1939, he had hinted to Vannevar Bush in a letter that he had begun thinking about communications and the methods by which “intelligence” moves from place to place.

Shannon had read a paper by a Bell Laboratories engineer named Ralph Hartley entitled “Transmission of Information” that made an enormous impression on him. Hartley had proposed ways to measure and think about the rate and flow of information from sender to receiver.

Perhaps there were deeper and more fundamental properties, Shannon now wondered, that were common to all the different kinds of media—telephony, radio, television, telegraphy included.

As Henry Pollak, a former director of the math department, recalls, it “was full of people who had a major area where they worked, just like I did, too. But they couldn’t turn a good problem down. If one came by you dropped what you were doing and had fun with it. Our job was to stick our nose into everybody’s business.”20

One of his paper’s underlying tenets, Shannon would later say, “is that information can be treated very much like a physical quantity, such as mass or energy.”29

(1) All communications could be thought of in terms of information; (2) all information could be measured in bits; (3) all the measurable bits of information could be thought of, and indeed should be thought of, digitally.

It is in the mind of a single person that creative ideas and concepts are born.”40

Workers with the most patents often shared lunch or breakfast with a Bell Labs electrical engineer named Harry Nyquist. It wasn’t the case that Nyquist gave them specific ideas. Rather, as one scientist recalled, “he drew people out, got them thinking.” More than anything, Nyquist asked good questions.

Bell Labs helped maintain and improve that system, he said, by creating an organization that could be divided into three groups. The first group was research, where scientists and engineers provided “the reservoir of completely new knowledge, principles, materials, methods and art.” The second group was in systems engineering, a discipline started by the Labs, where engineers kept one eye on the reservoir of new knowledge and another on the existing phone system and analyzed how to integrate the two. In other words, the systems engineers considered whether new applications were possible, plausible, necessary, and economical. That’s when the third group came in. These were the engineers who developed and designed new devices, switches, and transmissions systems. In Kelly’s sketch, ideas usually moved from (1) discovery, to (2) development, to (3) manufacture.

Physical proximity, in Kelly’s view, was everything. People had to be near one another. Phone calls alone wouldn’t do. Kelly had even gone so far as to create “branch laboratories” at Western Electric factories so that Bell Labs scientists could get more closely involved in the transition of their work from development to manufacture.

To innovate, Kelly would agree, an institute of creative technology required the best people, Shockleys and Shannons, for instance—and it needed a lot of them, so many, as the people at the Labs used to say (borrowing a catchphrase from nuclear physics), that departments could have a “critical mass” to foster explosive ideas.

Working in an environment of applied science, as one Bell Labs researcher noted years later, “doesn’t destroy a kernel of genius—it focuses the mind.”9

“Few companies are more conservative,” Time magazine said about AT&T, “none are more creative.”7

words there are gaps, pauses, hesitations.

in The Organization Man, William Whyte’s influential 1956 book that analyzed the conformity of America’s corporate culture and the merits of creative thinking. “If ever there were proof of the virtues of free research, General Electric and Bell Labs provide it,” Whyte wrote, pointing in particular to the achievements of thinkers like Claude Shannon. “Of all corporations’ research groups these two have been the two outstandingly profitable ones . . . of all corporation research groups these two have consistently attracted the most brilliant men. Why? The third fact explains the other two. Of all corporation research groups these two are precisely the two that believe in ‘idle curiosity.’”19

“Everyone faces the future with their eyes firmly on the past,” Pierce said, “and they don’t see what’s going to happen next.”30

Pierce often observed ruefully, “We do what we can, not what we think we should or what we want to do.”

“There’s a difference, you see, in thinking idly about something, and in setting out to do something,” he explained to an interviewer in the early 1960s. “You begin to see what the problems are when you set out to do things,

to an innovator, being early is not necessarily different from being wrong.

“human creativity [to be] converted to human benefits.”

“We engineer for high quality service, with long life, low maintenance costs, high factor of reliability, as basic elements in our philosophy of design and manufacture. But our basic technology is becoming increasingly similar to that of a high volume, annual model, highly competitive, young, vigorous and growing industry.”

“I don’t know how history is taught here in Japan,” he told the audience when he traveled there in 1985 to give an acceptance speech, “but in the United States in my college days, most of the time was spent on the study of political leaders and wars—Caesars, Napoleons, and Hitlers. I think this is totally wrong. The important people and events of history are the thinkers and innovators, the Darwins, Newtons, Beethovens whose work continues to grow in influence in a positive fashion.”

“psychoacoustics.” This was the relation, as Pierce described it, “between the acoustic stimulus and what we perceive internally—how it strikes us, what we can distinguish.”

“Ideas and plans are essential to innovation,” he remarked, “but the time has to be right.”

The point of innovation is what new technology can do. “Better, or cheaper, or both”—Kelly’s

John Pierce gave a slightly more elaborate explanation. “The only really important thing about communication is how well it serves man,” he said. “New gadgets or new technologies are important only when they really make good new things possible or good old things cheaper or better.”

“It’s the interaction between fundamental science and applied science, and the interface between many disciplines, that creates new ideas,” explains Herwig Kogelnik, the laser scientist. This may indeed have been Kelly’s greatest insight.

John Pierce did not flatter himself so much as to think that success in basic or applied research—those big leaps in scientific knowledge—were necessarily more heroic than development. “You see, out of fourteen people in the Bell Laboratories,” he once remarked, “only one is in the Research Department, and that’s because pursuing an idea takes, I presume, fourteen times as much effort as having it.”14

“You may find a lot of controversy over how Bell Labs managed people,” John Mayo, the former Bell Labs president, says. “But keep in mind, I don’t think those managers saw it that way. They saw it as: How do you manage ideas? And that’s very different from managing people. So if you hear something negative about how John Pierce managed people, I’d say, well, that’s not surprising. Pierce wasn’t about managing people. Pierce was about managing ideas. And you cannot manage ideas and manage people the same way. It just doesn’t work. So if somebody tells you Pierce wasn’t a great manager . . . you say, of what?”

“Incentives are fine,” Mayo says, “but they produce incremental improvements in what’s there.

A technically competent management all the way to the top. Researchers didn’t have to raise funds. Research on a topic or system could be and was supported for years. Research could be terminated without damning the researcher.

In 2006, for instance, “77 of the 88 U.S. entities” that produced significant innovations were beneficiaries of federal funding.19 Clearly, at least in regard to innovation, capitalism is more deeply intertwined with government than many of us realize.

Jack A. Morton, “The Innovation Process,” date unknown. AT&T archives.